If apple has problems obtaining content for an Apple TV why not just buy TW since they are on the market? Rumor has google, amazon and Fox interested. apple could buy Time Warner and sell the channels a la carte on its Apple TV. I believe Abc/Disney would follow suit and offer their channels ala carte. Don't see how Apple could not come out a winner in this. Apple could sell a new Apple TV with memory and sell 4k displays.
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Why not buy Time Warner?
- Thread starter kigrsmchugh
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Interesting idea, but I think the problem will be the content providers (ABC/Disney etc.) have licensed their content to TW in such a way that it can't be sold à la carte, so if Apple bought TW that same license would transfer and we would be right about where we are now.
My personal opinion is the way forward will be à la carte direct from the content providers using third party delivery devices like AppleTV, Roku and the like.
My personal opinion is the way forward will be à la carte direct from the content providers using third party delivery devices like AppleTV, Roku and the like.
The US Government and FTC will never allow it. Too many people and rivals (e.g. Microsoft, Google) will scream "monopoly!" and the acquisition will be stalled.
Not that MS and Google are saints themselves, since they are guilty of monopolistic or anti-competitive practices of their own.
Apple is not a content producer (in the TV/movie space), so it wouldn't, by itself, be an anti-trust violation. If Fox or Disney wanted to purchase, it'd get more regulatory scrutiny.
The problem for Apple is that TW competes with Fox, Disney, NBC/Universal, etc. If Apple becomes one of their competitors (currently, they're a partner/reseller), then it could endanger Apple's ability to make deals for non-TW content.
The problem for Apple is that TW competes with Fox, Disney, NBC/Universal, etc. If Apple becomes one of their competitors (currently, they're a partner/reseller), then it could endanger Apple's ability to make deals for non-TW content.
Well it wouldn’t stop companies from complaining, but the other point is that Apple’s competency is not in areas that Time Warner is involved in. Apple is not a ISP (that is not available in all markets and thusly is very regional for marketing). They aren’t a cable company, they aren’t a content maker and have no idea how to run such a company, nor are they familiar with Time Warners other entities.
That’s the real reason. If Apple would purchase a content company, they would make other companies extremely antsy since now they are dealing with a competitor instead of just a content distributor, now they are dealing with somebody who is a competitor that they believe has an advantage by not only owning content, but willing to make a bold offensive move. That’s rocking an already shaky boat.
I agree with your personal opinion, but not so much with the content providers point.
I'd also rather see Apple write a check for Dish or DirecTV - both with national, not regional, coverage. Buying DISH would get nationwide broadband coverage as well!
Regarding the content licensing, Apple's purchase of Beats included a statement that Beats would remain a standalone company. Beats had/has licensing agreements with music content providers - leaving Beats on its own doesn't necessarily change that agreements, and buying TW/DISH/DirecTV could mimic that business model.
And, as a Comcast Business Class customer, I'd also like to see Apple buy Comcast and then fire all of their customer service personnel the same day.
HobeSoundDarryl
macrumors G5
Exactly right. While we consumers dream of al-a-carte, all of the other players are not motivated to deliver on that dream unless there is more money in it for them. We're the source of that "more". Since our dream usually involves significantly cutting what we pay now, nobody is motivated to make it happen.
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Cable and satellite providers have the worst reputation for service as well as customer service. Consistently in the lower ranks of customer satisfaction in surveys (sharing the same low level ratings as many banks). No way on gods green earth would Apple ever buy such a service. None of these content providers are even close to the level of service Apple is looking to provide.
HobeSoundDarryl
macrumors G5
You might say the same for Apple & Samsung.
So far, the approach has been to litigate while simultaneously continuing to collaborate with parts of Samsung crucial to Apple delivering new Apple goodies. However, another approach to resolving competitive threats/issues is for one to buy the other. If Apple bought Samsung, the "copiers" would be folded into the "copied", the "samesung" would become the "same", the "die Samsung die" would be flipped to "buy Samsung buy" (much like Beats is now in transition from worst crap headphones to best) and so on.
So imagine that: Apple buys the biggest Android-making threat, takes ownership of all of the resources that seem to be able to deliver best for Apple product parts and opens countless doors for Apple Televisions, toasters, refrigerators, microwaves, construction equipment, and everything else that Samsung makes. Eliminate a greatest competitor, incorporate a greatest supplier, integrate a multitude of new places to easily take (or not take) the Apple brand.
Much like the Beats acquisition, "we" would near unanimously scorn it on the rumor, shift to "wait & see" as the rumors pile up into "likely going to happen" territory, gripe about it when announced, then quickly rationalize why it makes so much sense after Apple actually does it. The "abominations" and "junk" when labeled Samsung would become "shut up and take my money" when labeled Apple or endorsed by Apple's purchase but still labeled Samsung.
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Well, Apple is trying to hog the hardware side of things as well and be a one-stop shop for everything.
Samsung is still focused on the hardware aspect, whereas Amazon is trying to compete with iTunes rather than Apple itself.
Personally I think the key might also lie elsewhere, with the likes of Netflix and Hulu. If they can secure original content, possibly by taking over a studio or channel (imagine if they were in control of the rights to The Walking Dead), or even investing in productions themselves, they could have a stronger position than some of these networks/channels. Apart from live sports/news, on demand tv is the future.
The only problem is that this conflicts directly with the likes of iTunes or Amazon's offer. Why buy (at least when it comes to tv/films) when you can enjoy content for a flat, monthly fee?
Samsung isnt going to buy Amazon because Amazon is GROSSLY overvalued. Today its trading at a P/E of 559.89, and the majority of Analysts think its going to show a loss for the last quarter. Something it does with remarkable regularity.
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I have thought that for awhile, but after the recent negotiations for the SEC Network, I am not sure that is actually true now. Comcast is paying ESPN (owner of the SEC Network), $1.40 per month per customer for the 11 states that have SEC teams and $0.25 in all other areas. Either of those prices are way below what I would be willing to pay for the station, so I am not as sure as I used to be that ala carte cannot happen.
The $1.40 per customer is besides what cable companies spend on the channel bundles the studios force on them. That cost is on top of other costs.
Delivering video programmes to you is quite expensive.
HobeSoundDarryl
macrumors G5
Sure but Disney who owns ESPN and a bunch of other channels can't get behind al-a-carte unless the it gives them MORE than they get on those bunch of channels now when you or I choose to buy just one channel like ESPN. Your implication is that if the cable company must pay $1.40 or 35 cents, in al-a-carte world, those of us that want ESPN can pay either $1.40 or 35 cents too… or, as you offer, maybe a little more, and the math works. But it doesn't.
As is, when you pay your $1.40 or 35 cents, every other person in that cable system is paying it too. In al-a-carte world, it's unlikely that every other person and you & I will keep paying 35 cents or $1.40 or a little more, so the directly-attributable revenues via subscribers would go down.
Now, lets further assume that all the other channels in the Disney package cost maybe $5 per subscriber "as is" (I'm just picking that number out of the air). In al-a-carte world, maybe "we" subscribe to all of them too at $5 or a little more but again, as is, EVERYBODY is delivering that $5 for all of them. I can easily identify a number of Disney channels that I wouldn't want if I could buy them al-a-carte. I bet you can too. And I further bet just about everyone else can too. So something less than that $5 is Disney's proposition in embracing al-a-carte. Why should Disney do it? What's in it for them?
Here's another: the commercials that run on that <number of channels "I" don't watch" that wouldn't be in my al-a-carte> channel bundle help subsidize the Studios. So, as is, a bunch of Disney channels that I won't watch have commercials running on them that I don't see that flows revenues to Disney who can then use those revenue toward making some of the Disney content that I do want to watch. Al-a-carte kills those (eye of the beholder) "worthless" channels, killing off that subsidy revenue.
So, here's what al-a-carte might look like:
- Let's say, the average U.S. household pays about $70/month right now
- Al-a-carte probably needs that to grow up to about $90/month or more to have any chance of Studio support.
- The math will NOT be 200 channels/$100 = 50 cents per channel. "I" want to subscribe to 10 channels. 10 channels times 50 cents = $5. My new al-a-carte cable subscription should be $5 per month.
- Instead, the math would be something like, X most popular channels will be individually priced like HBO at about $10-$25 per month. For example, your (and my) ESPN channels, would probably be up there in that $2X/month range.
- Revenue & greater profitability modeling would evolve pricing so that the handful of must-have channels in al-a-carte will cost about $20+/month more than what is made out of the existing model from all subscribers (else, why do THEY bother?)
- Many of "us" then decide that the current model is the better value or, if the momentum kills the current model, we reluctantly embrace the new and talk about the good old days when we could get 200 channels for about 25% less than what about 10-15 channels cost now.
I recently looked into how much money is in the commercials. Per that math, the commercials (the vast majority of which "we" never see because they are running on channels "we" never watch) yield a revenue of about $54 per household per month. This needs to be covered in the al-a-carte scenario too. Either the commercials on the channels we are watching will need to cost a lot more (which has some potential) or our subscription fee will need to increase to cover the commercial subsidy lost in the switch to al-a-carte.
Let's split the difference for "what if" purposes, meaning the commercial selling machines are able to persuade the buyers to pay a lot more to make up about half of that $27 per household. The other $27 will need to be modeled into the al-a-carte pricing for "our" 10-20 channels. If the numbers I've shared above are correct, current model is about $70/month on average. I'm guessing they need it to go up to about $90/month to make al-a-carte worth it to them. Add this $27/month to make up for the lost subsidy revenue. Net result:
As is: $70/month for 200 channels.
Al-a-carte: $117/month for 10-20 channels.
One more thing: why does a Comcast allow this new model to replace their lucrative cable model when a Comcast controls the pipes through which this replacement model must flow? They don't. They just raise their broadband tolls to make up for the lost cable revenue. So:
As is: About $45/month for broadband
Al-a-carte: About $100/month for broadband.
Where's Apple's cut in this new model? They seem to like the old 30% right off the top. So we better get their cut in there. If $117 covers the Studios interests + lost subsidy revenue, add the 30% on top of that so they net $117. That gets us to $167/month. Apple gets their 30%. The $117 gets Studio participation. And we get to pay a lot more for broadband too.
This is how it works if we want it. The numbers can certainly be off but not by much to the downside. It's easy to dream al-a-carte for us consumers but then try to make it desirable for all of the other players. Why should the Studios do it? Why should the broadband gatekeepers support it? What does Apple get out of it? Once you make the math work for the rest of the chain, the system we have seems much more appealing (IMO). The only way al-a-carte looks great is if someone(s) else in the chain takes a big financial hit so that we consumers can actually get a break on the monthly toll. Is that the Studios? Is that the broadband toll masters? Is that Apple? Once you rule all of them out (else, why should they support the change?) all that's left is us to cough up the "more money" to make al-a-carte desirable to them.
So, like you, I can't say it will never happen but it will take something drastic to make it go. It doesn't happen just to save us consumers most of the monthly cable bill we pay now. Nobody but us consumers- including Apple- have such a goal. If it's going to happen, I think you have to bypass the broadband middlemen, meaning we need some way to link our homes to an iCloud without going through pipes owned by Comcast, Time Warner, etc. That would solve one big hole.
Assuming that hurdle is leaped by something amazing, perhaps that something amazing can also take over the broadband connections for non-video at a dirt cheap rate relative to what we pay now. If so, the difference in what we pay for broadband now vs. this amazing new innovation could be put toward the Studios. Perhaps that can be enough to make up for the $27 estimated in lost commercial subsidy? Maybe more? That's 2 birds with one stone.
Maybe Apple chooses to do this for less than 30%. Maybe something much less?
If so, that leaves us with the Studios who will still need to be paid more than they make now to be motivated to do it. If we could eject the Comcasts, etc out of the equation (both cable TV middleman AND broadband supplier) and if Apple as new middleman doesn't demand too much revenue to be the new middleman and if the amazing new replacement can deliver all broadband so cheap that there is meaningful savings in that bill, then the overall combination of paying a bit more to the Studios for the content, Apple taking a smaller-than-expected cut and being able to fully bypass the cable+broadband middleman might yield an al-a-carte offering at only about the $20 or so MORE per month than what we pay now. But that's a lot of "ifs" and it depends on a broadband communications breakthrough innovation that doesn't appear to exist now… PLUS us consumers paying more for 10-20 channels than what the 10-20 + 200 "I" never watch cost now.
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You have summed this up nicely. I feel most people who bring up ala carte think their current bill is devided by the amount of channels they have. They really do not realise that they actually are paying for a bundle of channels at a discount. The studios and networks sell bundles to cable/sat companies and they in turn sell in a bundle. Heck, even each channel is giving you shows in a bundle. Look how many shows are on each channel
As I said before if people want to get an idea of how much ala carte will cost, go to the iTunes Store and start purchasing only what you watch.
Your cable bill will start to look like a bargain!
I read that post too, and I respectfully disagree as some of the post's perspective (not analysis) is bullcrap. And, therefore, so is your post. You've both been beaten on the head so many times you can't see straight.
I've two friends from India, in which the government has required cost control and a la carte options on top of basic services - and cost caps. Then there's my friends from the Great White North, on Rogers and Telus and Videotron - that country doesn't require a la carte, but there's options for it on top of a basic package. They're all paying a fsck ton less for the same content I pay Comcrap for. (See this: http://www.reuters.com/article/2013/09/19/us-northamerica-television-analysis-idUSBRE98I0T020130919)
Canadian cable companies can offer *affordable* basic cable plus *affordable* a al carte with a sustainable business model, but US companies can't? Bullcrap.
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I think you should re-read that article you posted. here I'll show you a couple things that point out al Carte up north is not all that great for media companies:
HobeSoundDarryl
macrumors G5
I appreciate apparently wasting my time in writing all of that so that you can deem some of it "bullcrap" on an apparent premise that our government might decide to emulate the Indian government and put tight price controls on cable. OUR government???
I've read that in Iran gasoline costs about 40 cents per gallon because their government is also putting price controls on that product: http://wiki.answers.com/Q/How_much_does_a_gallon_of_gasoline_cost_in_Iran_today. I've read that the U.S. is going to out-produce Saudi Arabia in the next few years: http://www.bloomberg.com/news/2014-...gest-oil-producer-after-overtaking-saudi.html. Where's our 40 cent-per-gallon gas? Is OUR government also going to force that to happen? If Iran's government can make that happen, certainly OUR government can too, right?
Then, you shift into an example implying that I've said it CAN'T be done… as if there is some technological obstacle. Certainly WE can do about anything WE want to do. If WE all wanted al-a-carte instead of the existing model, it would be here. But WE do not all want al-a-carte… just the segment of us that believe the dream that we will somehow be able to get everything we want to watch- now and in the future- for a fraction of what we pay now… AND that the other players will just keep right on being able to deliver it all for a fraction of their cash flows… AND that we can pile Apple in on top of all of that and let them have a big cut too.
Sure, IF the government decides to force al-a-carte and IF the government decides to force price controls and IF the various players comply with those government mandates and IF Apple decides to step in as middlemen and IF the Studios at the other end of the chain can somehow take most of the financial hit but still be able to motivate all of the people that make the shows "we" want anyway, THEN you are absolutely right.
Would you like to make a bet on all that happening? I'll give you great odds.
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The only place to get true ala carte is bittorrent/usenet. It's sad that a free service is better than a paid one.
Except they only offer a fraction of the content and there are region restrictions on most of it.
you expect studios to just open up their content they paid $$$ to make just to make you happy? Hey they have LearJets to fuel up, so you gotta pay up.
No, but then I don't feel any sympathy when they bitch and moan about piracy. They want to have their cake and eat it too. It's working for them now, but they will be forced to change their business model eventually like they had to do with music. They are literally living off of old peoples cable subscriptions. 300 channels and nothing to watch.
Why should I have to pay $100 a month for cable just to get Game of Thrones? I'll just buy it on itunes, oh wait, it's not available there until 9 months after it airs? Gee, I wonder where else I can find it?
http://theoatmeal.com/comics/game_of_thrones
